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| The syllabus will change from time to time. Printing is not recommended. |
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Page last modified Friday, November 30, 2001, 8:50 A.M.. |
Assigned material
P. McDaniel, Federal Income Taxation -- Cases and Materials, Fourth Edition (1998, Foundation Press)
2001 Supplement, to be read in conjunction with the main text.
Selected Federal Taxation -- Statutes and Regulations, most recent edition (West Group, M. Rose, Ed.). The assignments of code and regulations sections are made by the main text.
Recommended material
D. Posin, Federal Income Taxation of Individuals -- With Diagrams for Easy Understanding of the Leading Cases and Concepts, 5th edition.
Open book exam
The final exam will be an open book exam. This means you may have with you and use the assigned reading material, even if the edition date is different. It does not mean that you may have the recommended reading material. You may not have the recommended reading material.
You may have with you and use any notes you made in connection with this course, regardless of the source from which you made the notes including, without by way of limitation, notes from class or from any book in the library, and notes from the notes of another student in the class as long as you have that student's permission. Having someone type your notes for your use is permissible as long as you made the notes from which the typing is done.
Reading assignments
Plan on an average of roughly 20-25 pages per 50 minute class period, plus associated code and regulations.
Week 1
Tuesday
Part I, Introduction to Federal Income Taxation
Chapter 1, Introduction to Federal Income Taxation, pp. 1-62
Thursday
Part II, Gross Income
Chapter 2, General Principles of Gross Income, pp. 63-86
Old Colony Trust Company v. Commissioner, p. 66, is foundational.
Week 2
Tuesday
Chapter 3, Employee Fringe Benefits, pp. 87-115
Chapter 3 will receive less class time than its 23 pages and a whole chapter in the book might lead you to suspect.
Chapter 4, Windfalls, Gifts, Inheritances, and Similar Items, pp. 116 through Com'r. v. Glenshaw Glass.
Thursday
Chapter 4, Windfalls, Gifts, Inheritances, and Similar Items, from just after Com'r. v. Glenshaw Glass.through p. 158
Commissioner v. Duberstein, p. 122, is foundational.
Chapter 5, Loans and Other Receipts Balanced by Offsetting Obligations, pp. 159-168
Week 3
Tuesday
Chapter 5, Loans and Other Receipts Balanced by Offsetting Obligations, pp. 169-189
James v. United States, p. 169, is famous, important, and may provide the opportunity for a systemic discussion.
Chapter 6, Income From Dealings in Property, pp. 190-221
Doyle. v. Mitchell Brothers, p. 190, is foundational.
Eisner v. Macomber, p. 192, is foundational.
Thursday
Chapter 6, Income From Dealings in Property (continued), pp. 221-227
Philadelphia Park Amusement Company v. United States, p. 221, is the foundation.
We will spend extensive time on Philadelphia Park, which calls for very close reading.
An example may help.
Week 4
Tuesday
10 minute mini-lecture on Philadelphia Park example. (If you previously printed the two pages of the example, please do so again. There were a few minor typographical errors, and one that was significant.)
Student questions on example or on basis generally.
Chapter 7, Damage Awards and Settlements and Insurance Recoveries, p. 228-246.
Chapter 8, Treatment of the Owner of Annuity and Life Insurance Contracts, p. 247-257
Chapter 9, The Relationship of Basis to Income Recognition, pp. 258-264
Thursday
Approximately half of you were absent at the beginning of the first class last Tuesday, very understandably. I announced at the beginning of class that those there should feel free to leave. Some did. World events were a proper subject of attention.
I conducted class, both periods, for the benefit of those who came and wished to stay. I had been watching the news before the first class and was myself distracted. I also watched the news during the break and was quite distracted during the second class.
I plan to have a make-up class for the benefit of students who missed class on Tuesday. With the benefit of knowing how discussion went on Tuesday, and with some inefficiencies due to the distraction of events on Tuesday, I believe I can cover the ground we went over on Tuesday in only one hour or so in a make-up class, perhaps 60-70 minutes, maybe less.
It would be beneficial to have the make-up class soon. I am thinking of Friday or Monday. We will discuss this on Thursday.
Chapter 9, The Relationship of Basis to Income Recognition (continued), pp. 264-281
Chapter 10, Income From the Discharge of Indebtedness, pp. 282-299
Week 5
Monday
Make-up is at 3:40 in Ulbricht. This is a room change.
10 minute mini-lecture on Philadelphia Park example. (If you previously printed the two pages of the example, please do so again. There were a few minor typographical errors, and one that was significant.)
Student questions on example or on basis generally.
Overview of
Chapter 7, Damage Awards and Settlements and Insurance Recoveries, p. 228-246.
Chapter 8, Treatment of the Owner of Annuity and Life Insurance Contracts, p. 247-257
Chapter 9, The Relationship of Basis to Income Recognition, pp. 258-264
Tuesday
Chapter 10, Income From the Discharge of Indebtedness, pp. 299-301
This assignment includes Preslar v. Commissioner in the Supplement.
Chapter 11, Tax Expenditures, pp. 302-344
Thursday
Part III, Business Deductions and Credits
Chapter 12, Ordinary and Necessary Business and Profit-Seeking Expenses, pp. 345-391
Week 6
Tuesday
Chapter 13, Deductible Profit-Seeking Expenses Versus Nondeductible Capital Expenditures, pp. 392-428
Thursday
Chapter 14, Cost Recovery Mechanisms, pp. 429-473
Week 7
Tuesday
Chapter 15, Transactional Losses, pp. 474-505
Chapter 16, Interest as a Profit-Seeking Expense, pp. 506-521
Thursday
Chapter 16, Interest as a Profit-Seeking Expense (continued), pp. 521-535
Chapter 17, Business Tax Credits, 536-549
At the end of class today, the course is half over.
Week 8
Tuesday
Part IV, Dual Purpose Expenses
Chapter 18, Deductible Profit-Seeking Expenses Versus Nondeductible Personal Expenses, p. 550-590
Thursday
Chapter 18, Deductible Profit-Seeking Expenses Versus Nondeductible Personal Expenses (continued), p. 591-621
Chapter 19, Expenditures Involving Both Personal and Capital Aspects, pp. 622-633
Week 9
Tuesday
Chapter 19, Expenditures Involving Both Personal and Capital Aspects (continued), pp. 633-645
Part V, Deductions and Credits for Personal Living Expenses
Chapter 20, Basic Exemptions, Standard Deduction, and Earned Income Credit, pp. 646-660
Chapter 21, Itemized Personal Deductions, p. 661-675
Thursday
Chapter 21, Itemized Personal Deductions (continued), p. 675-708
An understanding of the 1st Amendment may be relevant to §170.
The 1st Amendment is said to establish a wall of separation between Church and State. Fortuitously, one effort has been made to support this interpretation using Robert Frost's words "Good fences make good neighbors."
Please find time to read the 1st Amendment and Frost's Mending Wall, the former to find the wall and the latter to see what Frost really said.
You can find the 1st Amendment and Mending Wall through the Diversions page. There are three links to Mending Wall, since the old link went dead. Hopefully one will be active when you click.
Week 10
Tuesday
Chapter 21, Itemized Personal Deductions (continued), p. 708-732
Part VI, Taxation of Property Transactions
Chapter 22, The Role of Debt in Property Transactions, pp. 733-754
Woodsam is confusing. Crane and Tufts are heavy stuff.
Thursday
Chapter 22, The Role of Debt in Property Transactions (continued), pp. 755-769
Estate of Franklin is confusing.
We will explore §465 with a discussion of Jacqui Fine Arts Limited.
Jacqui Fine Arts is the subject of Rev. Rul. 79-432, discussion of which begins at the bottom of p. 767. But I was present when the real Jacqui blew into New Mexico from the West Coast for marketing in the winter of '77, so I will present something a little richer than the IRS's sanitized, stylized type.
In preparation for this exercise, go to my eldest son's drawing of me on the Ask the Professor page of this site. Ask yourself: What is the art? If the question is not intriguing, ask yourself where the art is when you turn your computer off. (The art is not a computer picture of an original created in carbon space; the original was done in cyberspace.)
Week 11
Tuesday
Chapter 23, Deferred Recognition of Gain on Dispositions of Property, pp. 770-783
We begin Chapter 23 with discussion of §1031. I recommend reflection on Philadelphia Park and on our discussion of basis in connection with Crane and Tufts as part of the effort to penetrate §1031.
Chapter 23, Deferred Recognition of Gain on Dispositions of Property (continued), pp. 783-801
Thursday
Complete discussion of Chapter 23.
Omit Chapter 24, Transactions Involving Leased Property: Has a Sale or Other Disposition Occurred?, 28 pages.
Chapter 25, Capital Gains and Losses, pp. 830-875
Week 12
Tuesday
Chapter 25, Capital Gains and Losses, pp. 830-891.
Most of today's material was already read once for class last Thursday, and most is just background reading.
Thursday
Chapter 25, Capital Gains and Losses (continued), pp. 891-939
Chapter 26, Sales of Assets Held for Use in a Trade or Business, 940-949
Week 13
Tuesday
Class is cancelled due to a death in Prof. Potts' family.
Thursday
A time will be announced for a make-up class on Friday. The time will depend primarily on room availability. A video tape will be made for the benefit of students who may have a conflict.
Chapter 26, Sales of Assets Held for Use in a Trade or Business (continued), pp. 949-957
Omit Chapter 27, Tax Shelters, 21 pages.
Part VII, Timing of Income and Deductions
Chapter 28, Tax Accounting Methods, pp. 979-1032
Friday, make-up class -- Friday, November 16th, from 3:40-5:30 P.M. in
the Pelzer classroom.Chapter 28, Tax Accounting Methods (continued), pp. 1032-1054
Chapter 29, The Annual Accounting Concept, pp. 1055-1084
Four copies of the November 16 make-up class video tape are on three-hour reserve.
Week 14
Tuesday
Four copies of the November 16 make-up class video tape are on three-hour reserve.
Omit Chapter 30, Deferred Compensation Arrangements, 38 pages.
Chapter 31, Deferred Payment Sales, pp. 1123-1138
Chapter 32, Interest on Discount Obligations, pp. 1139-1155
Part VIII, The Taxable Unit
Omit Chapter 33, Taxation of the Family, 30 pages.
Omit Chapter 34, Shifting Income Among Taxable Units, 41 pages.
Omit Chapter 35, Taxation of the Income of Trusts, 30 pages.
Part IX, Alternative Minimum Tax
Chapter 36, Alternative Minimum Tax for Individuals, 1257-1274
Thursday
Review - Absentees on last day of class should ask a friend for address of new hidden web page.
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